Amazon Business Hatches a Well-Planned German Launch

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Amazon Business has touched down in Germany. The B2B giant announced Tuesday that Amazon Business would be available in the Central European country for firms of all sizes that sign up for a free account.

Spend Matters recently spoke with Amazon to get the details of the German launch.


Amazon Business is capitalizing on Amazon’s existing investments in the region. The firm already has significant infrastructure in Germany. This includes:

  • Corporate offices in Munich and Berlin, along with three research and development centers (Aachen, Berlin and Dresden)
  • Nine logistics centers (Brieselang, Frankfurt, Graben/Augsburg, Koblenz, Leipzig, Pforzheim, Rheinberg, Werne and Bad Hersfeld)
  • Two distribution centers (Berlin and Olching)

Amazon also has two “Prime Now” stations in Berlin and Munich, and AWS operates a data center in Frankfurt.

This infrastructure is part of a “total of 80 offices, logistics centers, vendor and customer service centers, research and development labs and Amazon Web Services data center,” in Europe, according to Amazon.

Technology and P2P

The launch incorporates the same capabilities that US users have come to experience through Amazon Business, including simplified e-procurement capability (e.g., multi-user accounts, internal approval workflows, analytics/reporting, etc.) and integration as a punch out site/marketplace into existing procure-to-pay (P2P)systems.

It also includes the ability, according to Amazon, to “pay by invoice,” as well offering “VAT exclusive price display and invoicing.” Amazon is also offering what it describes as “premium shipping” on orders exceeding €29 for “millions of eligible items.”

Building on Regional Experience

We recently spoke with Amazon about the German launch of Amazon Business. These are a number of quick facts associated with the German launch effort:

  • Amazon commenced operations in the region in 1998
  • The firm has invested “more than €5.8 billion in local infrastructure and equipment since 2010”
  • Sales in Germany are €11 billion (2015 numbers) and represent Amazon’s second largest segment after the U.S.
  • Amazon recently opened a number of German facilities, including “two distribution centers in Olching (near Munich and in Berlin), a new Prime Now station in Berlin, two new software development centers in Dresden and Berlin, and a new logistics center in Brieselang (near Berlin).
  • Additional 2016 investments include expanding the European logistics network, a new development center in Werne and “expansion of the European research and development departments in planning, as well as other infrastructures, including cloud computing.”

Category Coverage, Tail Spend Management and More

From a category coverage perspective, Amazon Business is aiming “cross industry.” According to the announcement, in Germany Amazon “offers more than five million tools, safety glasses, hearing protection, adhesives, abrasives and fasteners. Restaurants can access a broad selection including, specialty knives, pots and pans, mixers of all sizes and cash registers. Universities and labs can purchase from more than 50,000 types of scientific and lab supplies, including microscopes, test tubes, digital scales and meters. Products range in size from titanium drill bits to industrial drill presses.”

Yet the sweet spot for many larger enterprises with Amazon Business has been as a tail spend supplier — a new type of marketplace consolidator, of sorts. Amazon has succeeding at penetrating SMB organizations as well and is now serving “more than 400,000 businesses.” The marketplace approach remains central to its model, with “with third-party sellers fulfilling over half of the orders,” representing some 45,000 third-party suppliers.

Beyond the Headlines

German procurement organizations love catalogs and appreciate good, efficient operations. We suspect the Amazon Business supply network, with its two main distribution centers and the larger number of logistics centers, is already largely optimized for forecast business demand (e.g., making sure MRO SKU coverage and inventory are close to industrial manufacturing centers).

Given these considerations, existing regional infrastructure and the planning involved in the launch, Spend Matters believes it would be highly unlikely if Amazon Business were not well received in Germany from the start.

Spend Matters PRO will be providing additional reporting and analysis of the Amazon Business German launch to subscribers in the next week.

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